A Bad Week For Canadian Netflix

##A Bad Week For Canadian Netflix Customers

Netflix has started cracking down on services that allow people to watch Netflix in countries other than their own. This was expected after a letter release on the 14th of January this year. In it, VP of Content Delivery Architecture, David Fullagar wrote, “Some members use proxies or ‘unblockers’ to access titles available outside their territory. To address this, we employ the same or similar measures other firms do…That means in coming weeks, those using proxies and unblockers will only be able to access the service in the country where they currently are.” At the time the news was greeted with derision and a sense that Netflix was not going to be able to follow though due to technical hurtles and was just saying this to appease content licensees.

In June of last year, Bell Media President Mary Ann Turcke said in a speech at the Canadian Telecom Summit what happened when she discovered her daughter was using a proxy service to get U.S. Netflix: “She is 15…and she was stealing…Suffice to say, there is no more VPNing [in the house].” and went on to conclude the goal should be that “It has to become socially unacceptable to admit to another human being that you are VPNing into U.S. Netflix”. While this caused less of a fuss than when former Justice Minister Vic Toews called people who wanted privacy on the internet on the side of criminals, it did sound reminiscent of the late 1990s heavy handed PSAs that equated stealing from a convenience store with downloading music. Of course this must be put in perspective: compared to other international networks, and even the CBC here, Bell Media produces little original programming that can be exported, replying on U.S. imports to fill its broadcast schedule. Turcke’s daughter could be putting Mom’s company out of business if she’s going to the source, rather than waiting for her favourite shows to be picked up by a Canadian network.

As of this week, the threat of losing access to U.S. Netflix became much more real as subscribers using VPN (Virtual Private Networks) services saw an unwelcome message: “Whoops something went wrong…you seem to be using an unblocker or proxy. Please turn of any of these services and try again” with a link to how to disable proxys.

The reaction was swift online, with Twitter filled with threats to return to BitTorrent, a file transfer technology invented by Bram Cohen in 2001 that because popular with movie pirates due to it’s ability to transfer large files (like movies) efficiently over slower broadband networks that homes had around that time. BitTorrent enjoyed massive success over the next few years, until companies like Netflix, like iTunes before it, provided a simple and affordable way for people to get access to content. Despite what the PSAs had tried to accomplish, people didn’t really look at at downloading a movie like stealing from the local store. What Netflix had done, was offer a more convenient way for people to get the same content for an acceptable price - and requiring a lot less technical know-how; essentually if you could go to a website, you could use Netflix (or other similar services like Hulu or Canada’s own CraveTV or Shomi services - owned by Bell Media and Rogers Communications respectively). How much of this online vitriol will translate into a return to BitTorrent by people who have become used to the ease of use of Netflix is anyone’s guess, probably it will be a minority as users will migrate to other services that have the licences to stream their favourite shows and movies. Of course, Netflix (and Amazon which also has a less-known streaming service, Amazon Video), not wanting to be bound by country restrictions are creating their own content.

But the technical attack on proxies was only part of the story. This is also affecting companies who offer this proxy services. These companies providing the VPN services depend on subscribers paying for that service so they can keep the lights on. Much like when credit card companies can choose to cut service for businesses they don’t approve of, VPN companies that advertised their services for getting around country restrictions where finding that they could no longer accept payments from their customers. PayPal also cut of support, essentially forcing them to change their business model or go out of business.

To add insult to injury, Netflix also raised their base prices this year by about $2 (US), including for customers who had been grandfathered in and spared last year’s raise.

Netflix first announced they were going to start doing this in January 2016. In a blog post on the company’s website, David Fullagar (Vice President of Content Delivery Architecture) said that this was due to “the historic practice of licensing content by geographic territories” - in other words, like Uber, old industries where holding back Silicon Valley’s master plans. One app, one standard, one leading company.

Canadians are, a bit justifiably, miffed about this, after all in the days of DVDs and Bluerays (incidentally where Netflix got their start years ago), the world was segregated into regions 1-6, Canada and the U.S. (but not Mexico) got 1, because, well the U.S. couldn’t be number two, Mexico was part of South America, along with Australia?, China got its own region code, Western Europe, the Middle East, South Africa, and Japan got another block (plus Greenland for some reason), finally Russia and Africa and everybody else got number 6, because let’s face it, most people in Hollywood get Minsk and Mozambique confused easily as long as they’re not adopting babies from there.

Where this goes from here is going to be interesting. While Netflix is undoubtedly going to remain the name people associate with streaming TV, the technology behind it, while impressive how simple it makes what is technically a challenge when one considers how many people use it daily and expect a experience as smooth as turning on a TV and watching a show - abet without the commercials, it’s not something that can’t be copied by broadcasters with deep pockets - and an interest in keeping control of their viewers - HBO comes to mind right away, and no doubt this is the thinking behind launching Crave and Shomi.

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